Originally from Dispute Resolution Journal

An eBay seller just gypped you. You bid $500 on a 19th century teacup with a gold leaf rim. The seller, an antique dealer in Italy, claimed it was in “mint condition” and showed a perfect-looking specimen in a photo on the eBay site. But the cup was damaged. It had a chip and a faded edge and it definitely was not worth the 820,000 lire bid price. What recourse do you have? You could sue, but to do that you would have to go to Italy, since the seller does not do business in your state. That’s not practical or affordable. Fortunately, eBay uses an online dispute resolution (ODR) provider (Square Trade) to help its customers resolve disputes with sellers. This means that you can try to negotiate or mediate a resolution of the dispute online.

This is not the only type of ODR in use today. The insurance industry has used online dispute resolution for several years to facilitate the exchange of double-blind bids and offers for settlement of motor vehicle property claims. The parties exchange settlement offers through a series of web pages. They consent in advance to split the difference if the blind bids and offers are within an agreed upon range. Cybersettle, an ODR provider that has assisted the insurance industry with this program, claims it has handled over 70,000 settlements.1

Traditional alternative dispute resolution service providers, like the American Arbitration Association, are also experimenting with the use of technology to enhance traditional ADR services, such as by offering online filing and submission of documents. The AAA, for example, has a new online filing system called AAA WebFileSM.2 It has handled over 1,200 matters since July 2002.

There is no doubt that ODR has a major role to play in eCommerce. Due to the global nature of eCommerce, disputes can arise between buyers and sellers anywhere in the world about the quality, quantity, or delivery of goods or services. Indeed, such disputes are likely, if not inevitable.

ODR also has a significant role to play in more traditional ADR because of the desire to make the process as efficient as possible.

For ODR to work well, providers of ODR and ADR services need a way to communicate with potential users of the system. There must be “interoperability” between the provider’s computer system and the user’s system so that provider and user can transmit and exchange data and documents and interact.